Prospects for peace in the Middle East have been dealt a fresh blow as Israel's ruling Likud Party adopted a resolution never to accept a Palestinian state in the West Bank and Gaza.

This must be clear - there will not be a Palestinian state west of the Jordan river because that would be a deadly threat to Israel

Binyamin Netanyahu

The resolution was passed against the wishes of Israeli Prime Minister Ariel Sharon at a stormy central committee meeting, handing victory to party rival Binyamin Netanyahu, who had tabled the motion.

Palestinian leader Yasser Arafat denounced the Likud decision as he left the West Bank town of Ramallah for the first time this year.

Mr Arafat - who is due to visit the towns of Bethlehem, Jenin and Nablus - is travelling in a Jordanian airforce helicopter after his own aircraft were destroyed in Israeli air strikes.

In another development, European officials are to meet to decide the fate of 13 Palestinian militants who were flown out to Cyprus as part of the deal to end the siege at Bethlehem's Church of the Nativity three days ago.

Unanimous rejection

Mr Sharon had urged party members not to vote on the resolution, saying it would be against Israel's interests to rule Palestinian statehood out of any future settlement with the Palestinians.

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But in a secret ballot, party members voted by 669 to 465 for the vote to be allowed to go ahead - and it was passed almost unanimously by a show of hands.

After the stinging defeat, Mr Sharon made a brief statement saying he would honour the decisions of his party's central committee.

The resolution will govern future actions of Likud ministers, but it is not clear whether it is binding on Mr Sharon, who leads a broad-based coalition which includes Labour ministers who favour a Palestinian state.

Mr Sharon said: "I will continue to lead the state of Israel and the people of Israel according to the same ideas that led me always - security for the state of Israel and its citizens and our desire for real peace".

Voices from the Conflict

I am a big believer in the Bible and in Jewish history... The Arabs are just occupying land that doesn't belong to them

Mr Netanyahu insisted that Sunday's vote was not intended to unseat Mr Sharon, saying: "The prime minister is greatly respected here. This is a united party and Mr Sharon and I both belong to the same party."

Both right-wingers were booed and heckled by the other's supporters during their addresses to the committee.

The vote came after Israel sent home army reservists called up after the cabinet authorised military action in the Gaza Strip in retaliation for a Palestinian suicide bombing last week.

Defence Minister Binyamin Ben-Eliezer said the decision should not be interpreted as a surrender to "terrorism" and that Israel reserved the right to respond when it wanted.

Arafat tour

Yasser Arafat is travelling outside Ramallah for the first time since last December, when Israeli troops effectively trapped him there to force him to hand over people wanted by the Israelis and render him "irrelevant".

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He is being permitted by Israel to tour Bethlehem, Nablus and Jenin - three towns that became flashpoints during the recent Israeli military offensive.

Mr Arafat was greeted by local Palestinian officials, Muslim clerics and Christian priests as he arrived in Bethlehem - three days after the Israeli siege of the Church of the Nativity ended, Reuters news agency said.